Richard Cobden

An anti-poverty hero

In memory of a man who actually won an argument to free up farm trade

TWO hundred years ago, on June 3rd 1804, was born a man who led the first great campaign for free trade. His name was Richard Cobden, and he led the Anti-Corn Law League, perhaps Britain's first big NGO, which in 1839-46 fought to persuade Parliament to remove price controls and import barriers for wheat. By acting as a hefty tax on basic foods, Cobden argued, those controls impoverished ordinary workers, causing recurrent bouts of starvation as well as raising labour costs, dampening demand and discouraging other countries from allowing trade with Britain. It was one such bout of starvation—the Irish famine that began in 1845—that finally tipped the balance and persuaded Britain to repeal the Corn Laws. The prime minister, Sir Robert Peel, generously attributed the success of that repeal to one man: Richard Cobden.

It is all a noble piece of history, no doubt. But it is worth remembering for more reasons merely than that the episode began a period of free-trade success that lasted virtually until the first world war. One of the reasons, admittedly, is a selfish one: Cobden was instrumental in the launch in 1843 of a certain new weekly called The Economist, both by buying bulk subscriptions for League members and by leaving James Wilson's paper formally independent of his NGO, which helped it to survive and thrive after the Corn Laws had gone.

Much more important, though, is what Cobden's background and ideas represent in today's world, where trade is far freer than 200 years ago but is still viewed with an extraordinary degree of suspicion, and where agriculture remains a bastion of protectionism. Richard Cobden was no aristocrat, nor an advocate of the rich and powerful. He was the son of a poor farmer in Sussex, and made his own fortune by printing and trading calico textiles. That business became prosperous without free trade in food, and promoting its interests was not his motivation in leading the League. Indeed, his free-trade campaign ended up by bankrupting him. Rather, he had a wider interest at heart: the condition of the poor, and the potential role of trade in promoting a broadly based prosperity.

Time to abolish the food tax

While Cobden saw free trade as morally virtuous, he based his arguments more on the self-inflicted burden represented by protection. Price regulation and import barriers were a tax on bread and so harmful to all those who depended on buying and eating it (or who were thus forced to depend on inferior crops, such as the Irish with potatoes). Today, thanks to technology and economies of scale, food seems cheap to most people in rich countries. Yet it still carries a harmful tax.

On the OECD's reckoning, farmers in the European Union received support through subsidies and artificially high prices of €107 billion in 2002. That represented a tax on every household in the then 15 members of €686 a year, or $646. In America, total farm support of $40 billion in 2002 represented $366 for each household. Japan is the champion food-taxer among the rich giants, with its ¥5.5 trillion ($44 billion) in 2002 farm support costing nearly $1,000 for every household.

In Japan and the EU, domestic demand is painfully weak yet there is supposedly no scope to cut taxes in order to boost it. In the United States demand is stronger, but the budget deficit there is also far too large. So, as well as helping food-exporting poor countries, there is also a pragmatic, self-interested case for Cobden's solution: abolish the food tax.